Ground Rent Acquisitions
Central London Real Estate purchase ground rents from developers, landlords, investors, and other sellers looking to generate valuable liquidity and offload the many burdens associated with owning ground rents.
Central London Real Estate is a fast-moving real estate investment firm specialising in the acquisition of residential ground leases. We are established experts in the evolving asset class of UK ground rents, known for our pragmatic, forward-thinking approach and speed of execution.
Freehold ground rent as an asset is generally surplus to the core business objectives of landlords, real estate investors and house builders, requiring the knowledge of experienced ground rent experts and the use of complex valuation models to fully understand. Without large economies of scale, ground rents are challenging to manage and costly to administer, requiring numerous additional business processes, dedicated managers and procedures in accordance with lease terms and legislation.
Central London Real Estate’s comprehensive acquisitions strategy focuses on a combination of income ground rents, reversionary ground rents, private rented sector (PRS) assets and development / refurbishment.
Many large institutional ground rent investors and funds are slow and difficult to work with, most only looking to purchase extensive portfolios that exceed a minimum price threshold. Sellers working with many of these larger ground rent investors are frequently subjected to overly rigid approval requirements and excessive due diligence processes.
The combined knowledge of the Central London Real Estate team and our nation-leading specialist advisors enable us to transact with landlords, developers and other investors to acquire residential ground rents with efficiency, quality and transparency. These have never been attributes typical of ground rent investors.
Outside The Box Approach
The Central London Real Estate team purchases ground rents of all lease lengths and locations throughout England and Wales. Our innovative acquisitions strategy provides flexibility, enabling us to purchase ground rent portfolios consisting of 1,000+ units, companies and without the restrictions of a minimum value or low price threshold.
Our ground rent acquisitions come in various forms. We purchase ground rents with either fixed increase lease structures or increases tied to the Retail Price Index (RPI), with the latter being our preference. We also consider forward purchase agreements with developers. For such acquisitions, Central London Real Estate forward commits to purchase the freehold ground rent element of a new development. These arrangements improve the development’s overall viability, balance sheet and ability to secure financing at the predevelopment stage.
Quality Property Management
Property management of the highest quality is integral to the Central London Real Estate business. Our growing ground rent portfolio is focused on the acquisition of ground rents for buildings that have been under the professional management of leading property managers. As buildings in prime locations are more frequently managed by reputable property management firms, ground rents for residential assets within or directly connected to city centers are of particular interest.
Our dedication to providing leaseholders with top quality property management. As part of our commitment to maintaining high quality assets, we prefer to control the assignment of management for our buildings, rather than relying on leaseholder-owned management companies, which vary widely in quality and professionalism.
In addition to providing leaseholders with quality management, Central London Real Estate’ our highly regarded property managers further support our problem-solving acquisitions approach enabling us to skilfully acquire and resolve complex or challenging situations. We are highly experienced at acquiring and managing ground rents for sites in need of major works, extensive property management overhaul, unfinished or defective buildings.
Innovative Partnerships and Development
Throughout our business, Central London Real Estate sees value where others do not. This includes our ability to create opportunities and recognise the value of partnering with newer, less established developers. In fact, many of our largest acquisitions have stemmed from building long-term relationships with developers whose product initially did not fit the investment criteria of more traditional investors.
Central London Real Estate is continually partnering with developers of all sizes at all stages of predevelopment planning and development. Our Asset Management team and legal specialists provide valuable guidance when structuring rent review provisions in developer leases to maximise final development value by ensuring a competitive long lease hold interest.
Our development ground rent operation also focuses on the redevelopment and refurbishment of existing buildings. We purchase residential ground rents from landlords or developers who are refurbishing or renovating existing units to increase rental income and / or the value of a tenanted portfolio. We also invest in ground rents with opportunities for future development on the freehold land, often as a result of changes in local planning policies to meet growing population demand.